Bank of the Year, Bank of the Year Brazil & Investment Bank of the Year, Brazil: Itaú-Unibanco

Nov 1, 2013

A conservative banking strategy that has nevertheless sought out growth opportunities is paying off for Itaú, Latin America’s largest bank

There is cause for optimism for Brazil’s banking
sector — despite the challenges it faces on several
fronts. A slump in economic growth, a decline in average
interest rates and a slowdown in a decade-long cycle of credit
expansion have together meant higher credit costs and narrower
margins.

Next year’s presidential elections also spell
uncertainty, while there is concern over disruption —
following protests that erupted across the country in 2013
— when the country hosts the World Cup next
summer.

But optimism for the banking sector is based on what many
analysts see as prudent planning and a conservative approach to
doing business — operating principles that have
largely paid off for the country’s main private
lenders.

Profitability is unlikely to remain at past levels, Fitch
Ratings says. Bradesco and Itaú-Unibanco, the largest
non-government lenders in Brazil, have coped admirably with
changing circumstances and performed well compared to their
global...